Capital Gain

UBA in fresh bid to sell Uchumi land

Published: in BUSINESS by .


Companies

UBA in fresh bid to sell Uchumi land


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Uchumi Supermarkets branch in Nairobi. FILE PHOTO | NMG

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Summary

  • UBA Bank has revived its bid to sell troubled Uchumi’s Supermarket land situated on Langata Road over a debt of Sh172 million.
  • In an application before the High Court, UBA says Uchumi has failed to implement a Company Voluntary Agreement (CVA) agreed in March last year between the supermarket and 121 suppliers on how to settle Sh4.2 billion owed to them.
  • Under the CVA agreement that was initially opposed by UBA Bank, the retailer was to form a committee to ensure the payments are made on time.

UBA Bank has revived its bid to sell troubled Uchumi’s Supermarket land situated on Langata Road over a debt of Sh172 million.

In an application before the High Court, UBA says Uchumi has failed to implement a Company Voluntary Agreement (CVA) agreed in March last year between the supermarket and 121 suppliers on how to settle Sh4.2 billion owed to them.

Under the CVA agreement that was initially opposed by UBA Bank, the retailer was to form a committee to ensure the payments are made on time.

“The Company’s (Uchumi) failure to review and meet the terms of the CVA has had a detrimental effect on the Applicant/Bank as a secured creditor as it unjustly relieves the Company of its obligation to service the loan facility extended to it,” the application reads.

The lender says Uchumi has been in default of its facility for close to four years, terming it a huge concern to both the bank and its regulators given the negative impact it has on its depositors’ funds.

“That in view of the foregoing, it is in the interests of justice and fairness that the Applicant/Bank be granted leave to enforce its security,” the lender says.

Last year, the High Court stopped the planned sale and all pending debt recovery cases, outstanding loans and rent claims in favour of the CVA.

The lender accuses the troubled chain of failing to implement the CVA as agreed. In the deal last year, Justice Mary Kasango had indicated that the agreement would be reviewed in six months, in case Uchumi defaults.

Justice Kasango had ruled that all money claims currently before court be suspended to allow the payments to be made, failure to which Uchumi’s assets would be auctioned and the retailer evicted by landlords.

The retailer that is currently struggling to stay afloat has now reneged on the deal.

“The Company has failed to call a creditors’ meeting to review the CVA within the said 6 months as ordered by this Honorable Court.

“In light of the Company’s default of the court’s Orders, the Applicant/Bank seeks to enforce its security over that property known as Land Reference Number 209/12593 Nairobi as per the order of the Court,” said the Bank through Nyaanga and Mugisha advocates.

UBA says Uchumi’s failure to review the CVA greatly prejudices the Bank’s position as a secured creditor.

The bank says that Uchumi has been in default of its facility for close to four years which is a huge concern to it and its regulators given the negative impact it has on its depositors’ funds.

The moved by UBA Bank is a second attempt after the lender failed to get access to proceeds from the sale of Uchumi’s other land in Kasarani.



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